Notes on Constructing the Audit These notes

Notes on Constructing the Audit These notes
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Notes on Constructing the Audit These notes describe details about the audit in the paper Measuring Geopolitical Risk by Dario Caldara and Matteo Iacoviello Construction of the Index Each month the universe of newspapers that we use to

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Notes on Constructing the Audit These notes describe details about the audit in the paper “Measuring Geopolitical Risk” by Dario Caldara and Matteo Iacoviello<br>
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Construction of the Index Each month the universe of newspapers that we use to construct our GPR index contains about ten of thousands of articles articles. This is set U.
Of these, only about 3 percent (see Table A.2) meet our computer-generated criterion to be included in the GPR index. This is set G.
Each month, The ratio G/U (appropriately normalized) is our baseline GPR index.<br>
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Design of the audit sample – Benchmark GPR Index SAMPLING FROM GPR ARTICLES (set G) We sample a subset of the articles that are identified as discussing high or rising geopolitical risks.

We code these articles as GPR=1, GPR=0, GPR=-1, as follows:
1 = the article contains references to high or rising geopolitical risks.
0 = the article contains no references to geopolitical risks, or is uninformative whether geopolitical risks are rising or falling.
-1 = the article contains references to low or declining geopolitical risks.<br>